T

he government said Thursday it plans to build small and mid-size LNG supply terminals in a bid to
secure energy supply across the archipelago.

The terminals, expected to cost no more than US$100 million for the smaller kind and $200 million for the mid-sized version, would support existing terminals that serve inter-island distribution.

The plan is being finalized and will be modeled on proven systems in Malaysia and Singapore — countries that have achieved energy security despite limited natural resources, said Kardaya Warnika, an expert staffer for the Energy and Mineral Resources Ministry.

“Our concern now is to construct the small and medium terminals next to the three other LNG terminals in North Sumatra, Central Java and West Java,” Kardaya said.

Smaller LNG receiving terminals that would supply less than 100 million metric standard cubic feet per day (mmscfd) could potentially be needed in provinces such as Bali and Sulawesi, he said.

Kardaya said securing sufficient LNG supply to fill the terminals would not be an issue because more gas blocks would be in full operation by the time the terminals were ready.

He was referring to, among others, gas blocks in Masella in East Nusa Tenggara and Donggi-Senoro in Sulawesi.

The government is currently constructing three LNG receiving terminals — in West Java, Central Java and North Sumatra.

The terminals in West Java and East Java, which are being constructed by state oil and gas producer PT Pertamina and state gas distributor PT Perusahaan Gas Negara (PGN), cost $200 million each and have a capacity of 500 mmscfd.

The receiving terminal in North Sumatra will be constructed by PGN and will cost $300 million.

Kardaya said construction on the terminal in West Java had begun, and that a contract had already been signed for the terminal to supply 240 mmscfd to state electricity company PT PLN.

“The LNG supply price for the receiving terminal in North Sumatra is still being negotiated, and we are still trying to secure enough land for the receiving terminal in East Java,” he said.

The new terminals are part of the government’s program to improve gas infrastructure in anticipation of higher domestic demand.

Currently domestic industries and household consumers especially in Java and Sumatra are facing a prolonged shortage of LNG due to infrastructure shortcomings.

LNG consumption over the past five years has increased significantly, reaching 4,233 mmscfd in 2009 from 3,541 mmscfd in 2005.

It was reported that the fertilizer and electricity industries were the two biggest contributors to the increase in LNG consumption.